Thursday, 7 July 2011

London Club posts record free reserves to consolidate financial strength

THE London P&I Club consolidated its financial strength by recording an overall surplus of $3.6m for the 2010/2011 year of account. This lifted free reserves to $145.1m, the highest level in the club’s 145-year history.

The club’s continued policy of achieving controlled growth in its membership resulted in a five per cent increase, of almost 2m gt, in owned entered tonnage over the course of the year. The volume of charterers’ business also continued to grow, and these developments produced a total entry of 42.5m gt at year-end, with more ships scheduled to attach during the course of 2011.

Chairman, John M Lyras, writing in the club’s Annual Report for 2011, says, “Advances of this sort, together with further steps to strengthen rating and deductible levels, augment the club’s financial strength for 2011/2012.”

Pointing out that the 2010/2011 policy year saw an unusually high number of claims in excess of $1m, Mr Lyras added, “Our claims exposure – whether to incidents involving our members or other clubs’ members through the International Group Pool – plays the greatest part in the club’s performance.” He emphasised that loss prevention awareness occupies an increasingly important role in the club’s activities, with further attention being given to the dissemination of relevant information through its loss prevention publication and alerts programme, as well as workshops and seminars provided in response to member feedback and requests.

Elsewhere in his comments in the Annual Report, Mr Lyras lamented the “inadequacy” of governmental response to the problem of piracy, and the troubling signs of increased risk to the wellbeing and safety of hostage crew members. The important Best Management Practices produced by the shipping industry and international naval organisations played a significant part in reducing the danger of piracy, but the way in which the risk has developed meant that the ‘industry debate over the potential role to be played by properly trained guards’ was ‘unsurprising’.

On another subject, Mr Lyras also expressed the hope that the provision by the clubs of a very substantial amount of information to those conducting the European Commission review of some of the International Group’s arrangements would help inform the EC case team’s understanding of the unique features of mutual P&I and the important benefits it delivers.